Sensex Trades Over 300 Points Higher, Dow Futures Up by 115 Points

Wed, 26 May 12:30 pm | Ayesha Shetty, TM Team

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Share markets in India are presently trading on a strong note.

The BSE Sensex is trading up by 389 points, up 0.8% at 51,027 levels.

Meanwhile, the NSE Nifty is trading up by 99 points.

Bajaj Finserv and Bajaj Finance are among the top gainers today. JSW Steel and Tata Steel are among the top losers today.

The BSE Mid Cap index is trading up by 0.2%.

The BSE Small Cap index is trading up by 0.9%.

On the sectoral front, stocks from the real estate sector, are witnessing most of the buying interest.

On the other hand, stocks from the metal sector, are witnessing most of the selling pressure.

US stock futures are trading higher today, indicating a positive opening for Wall Street.

Nasdaq Futures are trading up by 56 points (up 0.4%) while Dow Futures are trading up by 115 points (up 0.3%)

The rupee is trading at 72.77 against the US$.

Gold prices are trading up by 0.3% at Rs 40,029 per 10 grams.

Gold prices edged higher in Indian markets today, following the uptick in global rates. On MCX, gold futures were up 0.4% to Rs 49,049 per 10 grams. In the previous session, gold had risen 0.6%.

To know more about gold, check out our article on how to invest in gold here: How to Invest in Gold?

Moving on to stock specific news...

Among the buzzing stocks today is Godavari Power.

Godawari Power posted a multifold jump in consolidated net profit at Rs 3 bn for the quarter ended March, mainly on the back of higher revenues. The company's net profit in the year-ago period was Rs 342 m.

The company's total income rose to Rs 12.6 bn during the quarter from Rs 7.9 bn in the same period a year ago.

For the year FY21, the company's net profit also rose to Rs 6.2 bn from Rs 1.7 bn in the previous year. Total income in the last fiscal year was higher at Rs 40.8 bn from Rs 32.9 bn in FY20.

The company's board recommended a final dividend of Rs 13.5 per equity share of Rs 10 each for FY21 in addition to an interim dividend of Rs 5 per equity share of Rs 10 each.

The dividend recommended by the board is subject to the approval of the shareholders at the Annual General Meeting to be held on 28 August 2021.

The board also approved a proposal to set up a captive solar power plant of 250 megawatts (MW) capacity in Raigarh district of Chhattisgarh at an estimated cost of Rs 7.5 bn.

The project shall be funded mainly out of internal accruals. The power generated in this project shall be captively consumed in the company's plant at Silatra Industrial Area, Raipur, Chhattisgarh.

We will keep you posted on updates from this space. Stay tuned.

At the time of writing, shares of Godavari Power were trading up by 5.4% on the BSE.

Speaking of the stock markets, India's #1 trader, Vijay Bhambwani shares what he thinks about the much-hyped commodity supercycle, in his latest video for Fast Profits Daily.

Is it real? Or is it just a lot of hot air?

Why are commodity prices rising and will this bull market continue?

Tune in here to find out more:

In news from the banking sector...

HDFC Bank's NBFC Arm to Raise Over Rs 86 bn via Debt

HDB Financial Services, a subsidiary of HDFC Bank, has lined up plans to raise over Rs 86 bn by way of debentures.

There have been speculations about the company floating an initial public offering (IPO), but the company is likely to wait for the current disruptive period to pass as there are business challenges.

HDB Financial Services caters to the informal sector and self-employed segment. This segment has been the hardest hit post the Covid-19 outbreak and lockdowns. The impact is visible in the pandemic year when HDB's net profit crashed by a massive 50% from Rs 10 bn in FY20 to Rs 5 bn in FY21.

The second Covid-19 wave has further jolted the informal and the self-employed segments. The most affected loan segments are consumer loans, enterprise loans and asset finance.

According to sources, the board of the non-banking finance company (NBFC) met in April to clear the decks for raising over Rs 86 bn by way of non-convertible debentures (NCDs) in various tranches in FY22.

The funds would be utilised for fresh lending, refinancing existing borrowings, and boosting the capital levels.

BREAKING: India's Top Trader Reveals #1 Investment of the Decade

The company's capital adequacy ratio (CAR) is at 19% as against the regulatory requirement of 15%. In the current challenging environment, it makes sense to raise funds to boost capital.

Given the low interest rates, which could move up anytime because of the inflationary pressure in the economy, there is an opportunity to tap the debt market to replace the high-cost debt with low cost.

Currently, NCDs contribute over 40% to the company's liabilities. The outstanding NCDs are over Rs 200 bn. The term loans from the back are the second-highest source with a 28% contribution at over Rs 150 bn.

How this pans out remains to be seen. Meanwhile, stay tuned for more updates from this space.

Speaking of HDFC Bank, note that the bank is one that has always adapted to changing times.

HDFC Bank wanted to transform itself from a leader in the physical banking to a leader in online banking. Since then, HDFC Bank has constantly focused on going digital.

In 2004, only 10% of customer transactions were initiated through internet and mobile. The number has gone up to 92% in 2019.

It is a great example of a company which has taken advantage of its scale and embraced disruption rather than fear it.

These are traits that one should look for in picking stocks. They not only withstand the disruption but also gain from it in the long-run.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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